Credit unions are growing at a rapid pace right now; membership is growing and they’re lending more money across the United States. It’s an exciting time full of opportunities, but just as many challenges face credit unions ahead. Boards of directors require better tools for analyzing, discussing, and coming to actionable decisions on these issues.
Growth vs. Risk
While there are signs that the era of low interest rates may finally be lifting, the process is gradual, and financial institutions are struggling to generate revenue through safe loans. Internal conflict is quick to arise as growth and risk management come to be seen as interfering with each other. Responsible, engaged boards can come up with a strategy for heading off this conflict before it becomes debilitating.
One major trend driving the credit union industry lately has been mergers, especially as smaller credit unions seek greater brand recognition in order to compete with banks. While credit union mergers mean it’s easier for institutions to offer 24 hour customer service, mobile banking and other FinTech products, as well as expand membership through brand recognition, boards need to discuss whether such mergers serve the interest of credit union members.
Many American credit unions are facing a crisis of retention because they haven’t faced up to the reality of today’s financial consumer. Whereas in the past, credit unions could rely more on loyalty when it came to retention, today financial customers have a clear idea of the financial products they want and are faster than ever to switch institutions. When institutions only look at their net gain membership, they can lose sight of a growing retention issue. Institutions that want to get ahead of their retention problem need to start looking at leading indicators right away and intervene before the exit happens. Losing members at a high rate is a sign that the credit union isn’t providing a value-added financial service, which will also reflect on revenue growth. Board portals can help administrators share analytics taken from these indicators with directors faster and help speed up the discussion on how to intervene.
Credit unions faced with low retention rates, ethical questions over mergers, aging membership, and new growth strategies need board portals to bring good governance and strategic discussions to their meetings. One technology solution they can use is a board portal like Aprio Boardroom, a software platform that works both in web browsers and as a tablet app to securely distribute documents to board members and make updates across the board. It allows administrators to upload board documents, automatically sending directors email notifications that lead back into the portal. Sending documents by email is not a secure method of distributing information, nor are free file-sharing services. Credit unions that must comply to legislation regarding their members’ and borrowers’ data can make sure they are in compliance with the board of directors portal from Aprio. There are many board portal solutions out there today, but unlike in the past, a higher price is no longer an indicator of superior security. Options like Aprio Boardroom offer advanced security at an accessible price, and when you’re looking for a vendor, you should also consider their customer service support. Credit unions across the United States are upgrading to board portals; don’t get left behind as you face unprecedented challenges.